Friday, February 09, 2007

Numbers Don't Lie, But Those Who Manipulate Them Do

by Kyle Michaelis
Ernie Goss, an economics professor at Creighton University, has long been the Omaha World-Herald's expert-of-choice on all matters of tax policy and the economics of the Great Plains. Although in no place to question the man's credentials, this privileged status seems to have more to do with Goss' history of telling the World-Herald what they want to hear than with the quality of his scholarship.

For a plain-as-day illustration of Goss' World-Herald-approved but academically questionable work, you need look no further than the column he co-wrote in the World-Herald's Tuesday edition. In it, he sounds a familiar alarm against state legislators listening to their constituents and focusing their tax reform efforts on relieving our state's heavy reliance on property taxes:
Over the next several weeks, Nebraskans will witness an important debate between Gov. Dave Heineman and several key state legislators. Gov. Heineman seeks to provide Nebraskans with tax relief via an income-tax reduction, while many legislators wish to promote tax relief through property-tax cuts.....

The 2006 ranks by the Tax Foundation placed Nebraska sixth-highest in the nation in terms of state and local tax burdens. The same rankings for Nebraska's geographic neighbors were as follows: Colorado, 38; Iowa, 26; Kansas, 18; Missouri, 34; South Dakota, 45; Wyoming, 33....

Nebraska politial leaders often place special emphasis on property taxes. However, policy-makers should keep in mind that, as a percentage of total tax collections, property-tax receipts in Nebraska (32.1 percent of total tax collections) are in line with those in Colorado (31.8 percent), Iowa (35.6 percent), Kansas (35.1 percent), Missouri (26.8 percent), South Dakota (36.8 percent), and Wyoming (30.6 percent)....

In our judgment, the special attention paid to property taxes is misdirected and obscures the need to reduce the growth in Nebraska's overall tax burden in order to increase the state's economic competitiveness....

There are several objectives in implementing changes in tax policy or burdens. First, changes should make administration simpler and compliance easier. Second, changes should contribute to economic growth and long-run properity. Finally, changes should more equitably distribute the tax burden....

The goal of the tax policy change should be to increase economic competitiveness while maintianing a fair system. Thus the change must reduce tax burdens and not merely shift them.
Where to even start? Quite frankly, Goss' column is so full of spin and so lacking in objectivity that any self-respecting economist should be embarrassed, if for no other reason than the sheer obviousness of these defects. Economists are notoriously ideological and selective with their facts, but it's a sign of a very bad economist when even a layman can see through as weak an argument as Goss has here put forward.

For starters, Nebraska's ranking by the so-called "Tax Foundation" as having the 6th highest tax burden comes in direct conflict with an alternative study Goss makes no mention of that put Nebraska's overall tax burden at 21st in the nation. Nothing to be proud of either way, but it's clear Goss would rather use the numbers that best serve his agenda without even acknowledging that other - less inflammatory - numbers exist.

Then there's this matter of Goss playing the percentages game to make it look like Nebraska isn't so over-reliant on property taxes. After he's just admitted that our overall tax burden is too high, he then wants to undermine efforts to reduce the tax that is most responsible for our high ranking. This is not legitimate criticism, and it pretty well establishes Goss as willing to say anything to advance the Goss/World-Herald/Heineman agenda focusing on cutting income taxes for Nebraska's wealthiest citizens.

Think about it - if our total tax burden is too high, it's absurd and insulting to claim that cutting the tax that makes up the largest percentage of that total burden (the property tax) is somehow "misdirected." Worst of all, Goss is the one who obscures the truth about Nebraska's property tax burden by only reporting it as a percentage of our total burden without making any mention that, by the same per capita measure he'd just used for our overall ranking, the people of Nebraska face much higher property taxes than our neighboring states (which the people already knew, despite Goss' attempt at deception).

Meanwhile, Goss again attempts to deceive with his call for a more equitable distribution of the tax burden. Why doesn't Goss just come out and say what he really means with that statement? He wants the poor and the working class to take on more of the tax burden so the corporations and the wealthy will pay less.

With the help of Goss and the World-Herald, Gov. Dave Heineman was already able to deliver on that equation for the corporations with the Nebraka Advantage Act. Now, all three are doing everything in their power to back that up with a repeat performance for the rich and the upper-middle class who will see the bulk of the benefit under Heineman's LB331, while some of Nebraska's lowest income wage-earners would actually see a tax hike - not just as a percentage of their burden but in cold hard cash.

Of course, it should come as little surprise that Goss chooses to end his column by repeating Heineman and the World-Herald's "tax shift" bullshit. What's ironic this time is that a World-Herald editorial on the opposite page makes a half-hearted concession of just how dishonest their constantly denouncing property tax relief in this fashion has been. Special thanks are owed to the Nebraska Democratic Party and its Executive Director, Matt Connealy, for forcing the World-Herald to make the overdue concession that property taxes very much ARE a state issue that no responsible leader or honest newspaper can disregard in their mutual rush to provide tax cuts for the rich:
The state, Connealy rightly says, gives local governments property-tax powers and "the responsibility to provide critical services." It also limits local tax-rate and budget growth. So how, he asked, is property-tax a local and not a state issue?...

Well, it's both, really....Neither Connealy nor Heineman is wrong.
Funny, that's quite the change of tune from what the World-Herald's been singing for the last three months. But, it's nice to see the World-Herald take a step back from its self-appointed position as Heineman's mouthpiece to essentially acknowledge how one-sided and misleading their lame protests of "it's a tax shift" have been.

That this acknowledgement comes on the same day that Ernie Goss uses that simple lie as his fall-back position is rich with irony and just a tinge of sadness. It's a stark reminder of the extent to which the people of Nebraska are held hostage by the manipulation and message control that prevails in our media - particularly in the pages of the Omaha World-Herald.

Maybe the saddest thing is that we've heard it all before. And we will here it all again. And again. And again. And again...until Heineman and the World-Herald have achieved their burden-shifting objectives or have finally realized that the voters and the legislature won't be fooled on this one. At least, not today.

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Anonymous NE Voter said...

Good post. Ernie Goss is a nice guy and all, but you really hit the nail on the head.

The OW-H has always been the mouthpiece for the Chamber of Commerce and other related political and social special interests. While I don't like it, the fact is the publisher is free to slant its reportage anyway it likes.

In choosing to publish "opinionews," the newspaper does a disservice to the community. It's a shame, really, because I rather doubt that this product is what Peter Kiewit had in mind when he "saved" the daily from ownership by "outsiders."

I admit that I am a subscriber to the OW-H. However, I read a lot of other newspapers every day (Lincoln Journal Star; Kansas City Star; Wall Street Journal; and sometimes the Des Moines Register). Let me simply say that our community is really getting gypped.

I am particularly critical of the syndicated columnists the paper runs. Jonah Goldberg? Mona Charen? You've got to be kidding. Well, at least they seem to have dropped the likes of Michelle Malkin and Bill O'Reilly.

If I want to read that nonsense, I'd run to the Midlands Business Journal. However, I avoid that unless I've got a gallon of hand sanitizer at the ready.

Wake up, people!

Blogger Lisa Hannah said...

Good write up, Kyle. I admire the research you did. What's funny is that this write up got the attention of another, who basically devoted a whole blog entry to criticizing you.....for criticizing!

Funny stuff!!

Anonymous Anonymous said...

You have to understand that there is a difference between tax collections and who actually pays the taxes.

When the "so called" Tax Foundation (as you put them) ranks states, it is based upon their estimate of "economic incidence" rather than who merely writes the checks. For example, as they point out, even though Alaska gets billions of dollars in oil tax revenue, Alaskans aren't the only people bearing that burden. So looking at collections only can be even more misleading.

Would recommend you read this:

Anonymous Bill said...

There is hope in all of this. Readership of the Omaha World-Herald continues a decades long decline. For some bizarre reason their website has now been stripped of editorial and opinion content. The power of the Internet and of sites like the New Nebraska Network continues to increase. Yes, things could be better. In time I think they will be. Keep up the good work, Kyle.

Anonymous Anonymous said...

I was at state party headquarters recently, and I was told that Matt wrote his well-done essay on property taxes after the Herald called him and invited him to write.

Anonymous Anonymous said...

A blogger in Beatrice offered a deconstruction of Kyle's post here. The Beatrice post:

Anonymous TedK said...

NE Voter, thanks for mentioning the Midlands Business Journal. The first time I picked it up and went to the opinion pages, I couldn't believe the one-sided right wing propaganda being spewed by the columnists there. No wonder the business community slants so far to the right in this state.

Anonymous Dave Osborn said...

as of 1/1/09 there seem to be NO syndicated columnists in the Omaha Paper. Right across from the Public Pulse are all the dead folks now.


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